Lumber News Archives: Dec 2010

Lumber News Archives: Dec 2010

BC’s Mid-Term Timber Supply ; China Demolishes ; Pricewaterhouse Coopers Report ; Japan Housing Starts ; Housing Starts, Canada ; BC State of the Forest ; AbitibiBowater Resumes Trading
Structural Changes ; Madison’s Timber Preview-Lumber Liquidators ; KD Fir Log and Lumber Demand ; Massive Forest Fire, Israel ; Nova Scotia Changes to Forest Management ; Japan Continues Focus on Domestic Lumber; Fraser Papers Mill Sale and Restructuring Wood Cellulose Breakthrough ; US Construction Employment ; Vietnam Forest Products’ Imports ; US Home Sales ; EACOM Secures $50 Million ; Madison’s Announces . . .

December 17, 2010

BC’s Mid-Term Timber Supply

A letter, obtained by Madison’s, from British Columbia’s Minister of Forests, Mines, and Lands, Pat Bell, to Chief Forester Jim Snetsinger dated October 27, 2010, details instructions for further assessment of mountain pine beetle damaged timber.

The letter reads, in part:
“Forecasts of timber supply in the mid-term — the period between the ending of the economic shelf life of the killed pine and the time when the forest has to re-grow and again become merchantable — is now significantly lower than prior to the infestation. [ . . . ] It will be necessary to reassess management objectives that were developed when forest conditions in the province’s interior were very different. [ . . . ] I would like you to undertake analysis that can provide information on how changes to current management practices could increase mid-term timber availability in MPB-affeccted areas.”

Mountain Pine Beetle – Timber Supply Inventory

A presentation last week at the aptly-named Weldwood Theatre of the University of Northern British Columbia, in Prince George, by four researchers with the BC Forest Service shed some light on mid-term and future timber supply following the mountain pine beetle infestation.

First up was Dana Hicks, fire management specialist for the province of British Columbia, Prince George Region, with an update to beetle kill statistics and forest fire practices. The current mountain pine beetle infestation has now killed a cumulative total of 675 million cubic metres of timber, or estimated at 16.3 million hectares (equal to the size of the state of Maryland). Incentives to bring down the recently-dead beetle kill trees has brought the harvest of that timber to over 230 million cubic metres.

One to three years after the tree is attacked the pine needles turn red. At this stage there is a potential of large fires with rapid rates of spread. In addition the dead fuel reacts quickly to changes in relative humidity. While large tracts of timber have been lost to recent fires, there has been good regeneration response. However there are post harvest debris fuel management problems in the form of ‘standing grass’ left behind.

After three to ten years of beetle infestation, the pine needles turn grey. In drier climates, there is usually still a sparse understory, and some Conifer understory, as the canopy is only beginning to allow more light to reach the forest floor. At this stage the dead trees are seen as a mid term timber supply. In wetter sites, there is a deciduous and Conifer understory but with fall down occurring due to water table issues. The site begins to look something like ‘standing slash’.

The following speaker was Craig DeLong, research ecologist also for the Prince George Region, about valuing the forest following pine beetle attack.

“There are different values in the forest which are shifting as time goes on in the beetle kill landscape,” explained DeLong to Madison’s in a phone interview.

When asked to comment about the current fire risk DeLong said, “The threat of fire, for example, when leaving the standing-dead timber in the forest, is that the fuel makes fires burn more intensely. However, the current salvage practice leaves behind slash piles which are also a fire danger. Those piles of wood burn intensely, and the surrounding grass spreads fire quickly.”

DeLong and his team established 50 plots in 2005 in the Vanderhoof Forest District, to determine the effects of the pine beetle on the ecosystem and tree properties over time. The focus of the research was to determine: tree fall down rates (timber value loss, fire risk); advanced regeneration release and natural regeneration establishment and growth; changes in stand structure and habitat features; and, lichen survival and growth (maintenance of caribou forage value).

For example, where the lodgepole pine trees have been dead for five years, in many cases the regrowth of spruce and fir underneath is abundant. It looks different than a plantation since the trees are different sizes and are more patchy in distribution.

As traditional timber supply inventory has been measured from an aerial perspective, DeLong’s study found that very high mortality of larger stems has been giving the impression of dead stands, however there is generally a lot of live understory.

“As the main forest canopy dies, the value of that timber for lumber declines as the trees dry out, check, and eventually fall down,” detailed DeLong. “With the increase in light reaching the forest floor, saplings grow more rapidly, which ends up being a sort of ready-made plantation.

Of course the results vary across the landscape; in some areas there is a lot of understory, in others there isn’t. For example, in some cases the regrowth looks like a 20 year old plantation, where the lodgepole pine trees have been dead for five years.

“The important thing here is that when the basal area, or volume, is added up, it is carrying approximately the same amount of wood as an 20-30 year old plantation.”

As the pine beetles moved through British Columbia, it was mostly the lodgepole pine that was attacked. DeLong’s research found that the remaining big trees, for example spruce, are now growing much faster without that competition. The value of these remaining big trees is important for biodiversity, in terms of the water table, protection, animal habitats, and more.

“We must be strategic about which stands we harvest,” continued DeLong. “In a lot of the places we studied, there is a whole new stand underneath the dead lodgepole pine trees, which in some places will be harvestable in 30 years.”

The current wisdom points to 80 years out for a mature lodgepole pine tree to grow.

Also speaking at last week’s meeting was John Pousette, tenures/fibre officer for the Prince George Forest District, about secondary stand structure and its timber supply implications.

Pousette’s first-of-its-kind study looked at 1,300 plots in the Prince George and Vanderhoof Forest District, and his research data shows that some short-term pain could lead to long-term gain. Approximately 130-thousand hectares of pine beetle-attacked stands with more advanced regeneration in the region — 70-thousand ha in the Prince George area and some by Fort St. James — if left unharvested, those stands could fill that mid-term gap for the Prince George Timber Supply Area by one-million cubic metres per year, starting at year 15, in 2022.

Data shows that as of 2009, of the mature susceptible pine of 1.350 billion m3 approximately 50 per cent has been killed by the pine beetle. By 2022 it is projected that 65 per cent of the mature pine may be killed. Even with the increases to allowable annual cuts by 27 per cent, to 85 million m3, it is likely that as much as half of the dead pine will not be harvested before it reaches the end of its economic shelf life.

“In the past the forest service did not collect data on the understory, so we have been working to incorporate those volumes into the timber supply analysis, to recognize that it is there,” explained Pousette to Madison’s. “What could happen if we incorporated what we found with advanced regeneration?

“Using forest model Variable Density Yield Prediction 7 (VDYP7), the timber supply rises by roughly 6 per cent, or 7.02 million m3, per year in approximately 15 to 60 years [mid-term]. Using a individual-tree, spatially explicit model of forest dynamics called Sortie ND, the timber supply could increase by about 22.6 per cent, or 8.14 million m3.

“Depending on what growth and yield model you use, and if the timber is not all being harvested, a lot of those stands already have advanced regeneration. There is already a significant understory, and the effective age of the advanced regeneration is sometimes as much as 20 years old.”

Pousette said that, after the presentations, the mayors present from interior cities indicated confidence that they could continue to mitigate the loss of timber supply to the pine beetle with such efforts as changing management practices, fertilizing, thinning out the stands further, and more.

“My models start with current practices, as they are today,” concluded Pousette. “With effort we can push the mid-term timber supply even higher.”

China Demolishes

Confirming the need for buying lumber, according to Chen Huai, director of the policy research center at China’s Ministry of Housing and Urban-Rural Development, more than half of that country’s existing residential structures will be demolished and rebuilt in the coming 20 years. The Ministry was quoted on December 3 by Southern Metropolis Daily as saying that homes built before 1999 will be dismantled to make way for new development during the next two decades. Chen Huai said some historical relics that deserve protection will be spared the wrecking ball.

China annually sees more construction than any other country. In recent years, the nation has had up to 2 billion square metres of development annually. Each year, China uses 40 per cent of the world’s cement and steel. Around 40 per cent of building land is created every year by the demolition of older developments.

Pricewaterhouse Coopers Report

For the first time since 2Q 2000, all nine of the Western Canadian-based forest and paper producers tracked in the PwC 3Q 2010 report posted positive net earnings. The aggregate net earnings of $179 million during the quarter were an improvement from the losses totalling $201 million in the same quarter of 2009.

PwC Forestry 3Q

Aggregate net earnings during 3Q 2010 for the five Eastern Canadian-based producers tracked in the PwC report showed losses deepened to $637 million, down from losses of $ 351 million in 3Q 2009. Most producers reported softer demand, while some reported production and shipment volumes were up during the period.
Ten of the largest US-based forest and paper companies reported net earnings of US$2.3 billion during 3Q 2010, up substantially from US$1.2 billion in the same period of 2009.

The nine largest European-based forest and paper companies reported overall net earnings of €683 million during 3Q 2010, improving greatly from losses of €449 million in 3Q of the prior year.

Japan Housing Starts

October housing starts in Japan were 71,390 units, a 6.4 per cent increase over October 2009 and the fifth straight month of increases, according to Japan Lumber Reports. Seasonally adjusted annual starts were 813,000, a 2.9 per cent decrease from September.

Home Building, Japan

Owner’s units and units built for sale have increased steadily but units built for rent were lower than is traditional for October. Condominium starts dropped from 10,000 in September to 8,000 in October, says the Reports.
Wood based units were 40,991, a 5.3 per cent increase over September. Share of wood based units rose to 57.4 per cent of total building.

October building permits in Japan increased by 3.4 per cent, to 48,833 units.

Housing Starts, Canada

Canadian housing starts rose a greater than expected 11.6 per cent in November, to a seasonally adjusted rate of 187,200 units in November from a downwardly revised 167,800 units in October, Canada Mortgage and Housing Corp data showed on Wednesday.

Canadian Home Building

CMHC said urban starts rose 14.6 per cent to 163,100 units in November. Multiple units were up 20.9 per cent to 101,800 units, while single urban starts increased 5.5 per cent to 61,300 units.
November multiple-unit construction increased by 29,900 units in Ontario, while activity was stable in the Prairies and starts declined in other regions of the country.

Meanwhile on Tuesday, real estate firm Re/Max said that average home prices across Canada will rise next year, although sales will flatten in most major markets. Home prices should rise by an average three per cent to $350,000 by the end of 2011, Re/Max said.

Canada Mortgage and Housing Corp. said Thursday in its Rental Market Survey that the national vacancy rate decreased to 2.6 per cent, from 2.8 per cent a year ago.

BC State of the Forest

According to British Columbia’s State of Forests report released Thursday, the US’s total lumber consumption has dropped 51 per cent since 2005, and lumber prices hit a 40-year low in 2009.

BC lumber production declined 19 per cent last year compared with 2008. In 2009, forest product exports totalled $7.6 billion, compared with an average of $14.7 billion between 1996 and 2004.

At the peak of the beetle epidemic in 2007, over 10 million hectares of BC’s 55 million hectares of forested land was under attack. By 2008, the outbreak had spread over 14 million hectares, the report said, and killed half the province’s mature pine.

According to the provincial government, 40 per cent of the export value of BC forest products was shipped to China and Japan in September., compared with 42.5 per cent that went to the US.

Year-to-date, the province said the US accounted for 47.5 per cent of BC’s forest products export value, compared with 33.8 per cent for China in Japan.

By comparison, in 2005, the US accounted for 67 per cent of that export value while China and Japan’s shares totalled 17 per ent.

Still, September’s export value numbers are skewed by the fact the US is consuming far less BC forest products than it did five years ago.

AbitibiBowater Resumes Trading

The Montreal-based paper company that has battled deep financial difficulties for three years, announced Thursday it has finished restructuring its operations and has emerged from creditor protection.

Abitibi had been operating under court protection from bankruptcy in Canada and the United States since April 2009.

The company said it has dramatically lowered its operating debt to less than $1 billion from a high of $7 billion at the same time as it slashed fixed annual costs by $880 million.

Abitibi said it cut capacity by 41 per cent for newsprint and 32 per cent for commercial printing papers across North America.

Abitibi’s shares begin pre-trading on the Toronto Stock Exchange on Friday, using the same ticker symbol (ABH). Montreal-based Abitibi’s unsecured creditors are to receive shares in the company, according to terms of the restructuring agreement, in an initial distribution by December 17.

But the shares will be available for trading on a “when-issued” basis on Friday, said TSX owner TMX Group Inc. The listing on the TSX will be for slightly more than 106 million shares.

In a surprise move Friday, David Paterson, who led the company through a 20-month wrenching restructuring, will be replaced as CEO by current board member Richard Garneau. No clear reason was given for the change.
Paterson will stay on in an executive advisory role through January and a non-executive advisory role through next July, the company said.

December 12, 2010

Structural Changes

Shock waves went out through the British Columbia forest service and beyond in the last two weeks, fueled in no part by a provocative article published over this past weekend in a major Canadian national newspaper.

A British Columbia government announcement in late October took almost all players by surprise. Policy making and resource management in the province will now be split into separate government branches. Respective ministries remain in control of policy decisions while resource management for all affected ministries; forests, environment, energy, etc, will be grouped under a new Ministry of Natural Resource Operations (NRO).

As with any change, particularly one that appears from the outside to have been hastily arranged, temporary panic set in among long-term government staff and stakeholders alike.

BC Land Management Strategy

“NRO is responsible for the implementation and delivery of policy set down by the respective government ministries,” Steve Thomson, Minister of Natural Resource Operations explained to Madison’s in a phone interview Thursday. “For the most part it will be business as usual; industry and groups will get the same level of government services and responses they always have.

“NRO will have a more integrated approach than previously when each individual government department needed to be contacted for permits and authorizations. Existing and new investors will experience the ‘One Project, One Process’ model of the BC government. Processes will be streamlined. NRO will manage the land regionally as opposed to separate ministries handling applications on an individual basis.

“This change is about restructuring, it’s about doing better with existing resources and increasing capacity, it’s not about layoffs or downsizing. Permitting and authorizations will be integrated within a single ministry. The key to success is that the new system works on the basis of a collaborative approach in order to improve service by government to stakeholders,” detailed Thomson. “This change is not about reducing or weakening environmental standards, but rather about avoiding unintended consequences.”

BC’s Minister of Forests, Mines and Lands, Pat Bell, also took some time this week to speak to Madison’s.
“All the permitting agencies are now together in one organization,” explained Bell. “For the forest industry there will not be too many changes. Most importantly, BC Timber Sales remains under the Ministry of Forests, Mines and Lands. For mining, fishing, back country skiing permits, etc, interested parties will go from dealing with many agencies to one.

“For example if someone wanted to get a permit to dig a gravel pit, they would have first come to Forests for a cutting permit, then to Mines for a mining permit, then to Environment for a discharge permit, and on and on. After all permits were secured, there would have to be consultation with First Nations. Now, delivery on the ground will be done under one department.

“To integrate provincial resource management and keep it all under the Ministry of Forests, Mines and Lands would have made this Ministry very large and unwieldy,” concluded Bell.

In a remarkably cogent statement for 9:10 in the morning, John Betts, Executive Director of the Western Silvicultural Contractors’ Association, said to Madison’s in a phone interview, “Into a policy vacuum rushes speculation. I am sympathetic to my colleagues who are lamenting. It is possible that some of these changes are lamentable.

“On the other hand, having the people who make policy hold operations people accountable could make sense. The NRO is a melding of the forest investment account with other land-based resources.

“There is some discussion in the resource sector of BC’s forest industry that this may be an effort by the government to introduce chaos, to find out where the relationships are. It would be impossible to break down silos individually.”

Thomson also mentioned silos in describing the previous Ministry of Agriculture and Lands, saying there had sometimes been crossover agreements between two ministries to deal with joint responsibilities.

Betts continued, “Sometimes CEOs introduce a false imperative, sending staff scrambling. Everyone galvanizes and if there is success the CEO looks like a hero. At the very least, once this NRO shakeup is complete, we will see who among the bureaucrats land on their feet.

“My concern is that we have as yet not seen a mission statement or new doctrine for affected staff to coalesce around. As an observer, to me there seems to be an objective missing in these changes. If these changes are just about creating more efficiencies, the civil service might not buy in.

“Efficiencies often fall short of effectiveness,” stated Betts. “We’ll have to see as the changes unfold if the whole things just ends up unravelling for years into the future.”

To get a sense of how this change might play out, Madison’s contacted the Future Forest Strategies (FFS) section of the Strategic Policy & Planning branch of BC’s Ministry of Forests, Mines and Lands. Previously named Forests for Tomorrow, and Land Based Investment Planning strategies before that, FFS underwent its most recent restructuring in April.

“There have been a number of different programs in place to invest in BC’s land base, to manage that investment, to fund incremental activities like silviculture, and generally to manage forest health,” explained FFS Director Dave Bodak to Madison’s in a phone interview. “The latest change in April of this year was simply to take all those investment budgets and manage them together. We have already undergone a separation between identifying priorities and implementing strategy.

“In my daily workings I still speak to the same person; they are just operating under a different government umbrella now. In terms of my work and mandate, the new NRO does not have much effect. The NRO is actually less of an adjustment than we underwent in April,” said Bodak.

“The strategy remains the same but delivery of investments on the land base has changed,” detailed Bodak. “I used to deliver the same investments under the Forest Investment Account. Apart from learning new email addresses, we’re continuing to work as usual.”

Madison’s Timber Preview : Lumber Liquidators

The largest hardwood flooring retailer in the US disappointed shareholders with poor 3Q results, released at the beginning of November. A steep learning curve for employees as a result of new inventory tracking software was largely blamed.
Regardless, Lumber Liquidators continues to push forward with expansion plans in the US, Canada, and Europe announced earlier this year.

Contact us any time for a subscription.

KD Fir Log and Lumber Demand

As we have been reporting all year, log supply is the big story in the fir market. If you can’t get the logs, you can’t make the lumber. Not only is the weather affecting logging, many mills have been frozen out and production shut down with the cold. Potential buyers should be aware that makers are planning long down times for the winter holidays. Some will take all of December off while others have announced they will take only the last half out.

Massive Forest Fire, Israel

Israel’s largest fire in history, the inferno started Thursday in the north of the country. 42 people have already been killed and more than 17,000 have left the area. Most of the dead are prison guards who were on their way to move inmates from a prison in the forest when their bus caught on fire and overturned.

Israel does not have fire fighting airplanes and have turned to their neighbours in Greece, Cyprus, Britain, Turkey, Bulgaria, Russia, Egypt, Azerbaijan, Spain, Croatia, France and Jordan for help. Firefighters and equipment in the US and Australia are on stand-by.

Although the area was tinder-dry, there may be evidence that the fires were started by arsonists.
The fire is now over 4,000 hectares in size. Israeli Prime Minister Benjamin Netanyahu is calling it “a fire on an international scale.”

Israel Forest Fire

A 747 loaded with the fire retardant chemical left the United States for Israel Thursday night.

Egypt has also offered to assist in firefighting efforts by supplying fire extinguishing chemicals.

The European Union has activated its civil protection mechanism to assist Israel in fighting forest fires Thursday night in order to combat Israel’s worst forest fires in decades.

In addition, fire fighting aircrafts were offered by Greece, Spain, France, Cyprus, Spain and Croatia.
The commission reported that four Greek planes had already arrived on site Friday morning and 92 fire fighters from Bulgaria were on their way to Israel.

Nova Scotia Changes to Forest Management

The Nova Scotia government is making six strategic direction changes for forestry in the province to better protect forests, secure good jobs, and to ensure that Nova Scotia’s forest industry remains competitive.

Nova Scotia Forestry Changes

The strategic policy directions are:

• Reduce the proportion of wood harvested by clear cutting to no more than 50 per cent of all forest harvests over a five-year period.

• Prohibit removing whole trees from the forest site to maintain woody debris, which is important for soil and biodiversity management.

• Public funds will not go toward herbicide spraying for forestry.

• Private land owners will not need management plans to harvest their woodlots for non-commercial energy use.

• Analyze options for a provincewide annual allowable cut to limit total harvested amounts.

• Incorporate forest biomass harvest requirements in the Code of Forest Practice and revise regulations to ensure commercial users of biomass for energy or fuel production are registered buyers and subject to the same rules as the forest industry.

The Nova Scotia Department of Natural Resources is in the final phase of writing the natural resources strategy. The forest policy framework and more information is available at gov.ns.ca/natr.

Japan Continues Focus on Domestic Lumber

On October 19, Japan’s Ministry of Agriculture, Forestry and Fisheries began a theme of “moving towards doubling regional industry by doubling the supply and demand of domestic lumber,” to improve efficiency of lumber distribution leading to a 50 per cent self-sufficiency for lumber, according to Japan Lumber Journal.
Taking into account the results of all of the measures, the committee is also looking into what to expect in the shape and form of demand in 2020.

The estimates were forecasted with the assumption that housing starts in 2020 will be equivalent to 800,000 units and the amount of demand for pulp and wood chips used for manufacturing paper will increase 1.7 million m3 from the amount in 2009 with other conditions remaining the same.

Under these conditions, the total amount of demand in 2020 will be 81.1 million m3 for domestic and foreign lumber with a self-sufficiency of 52 per cent (63.21 million m3 and 27.8 per cent in 2009).

Fraser Papers Mill Sale and Restructuring

Fraser Papers Inc announced November 25 that it had been advised by M&M Consulting and Contracting that M&M would not be completing the acquisition of the company’s paper mill in Gorham, NH, on November 30th as scheduled.
Fraser Papers also announced that it had reached an agreement with Counsel RB Capital to sell the Gorham mill by way of a back-up bid. The agreement is subject to certain conditions, including court approval, and is scheduled to close on December 8, 2010.

The company has also filed a consolidated plan of compromise or arrangement with the Ontario Court overseeing its restructuring proceedings. These materials will also be filed with the U Court in Delaware.
Fraser Papers is seeking an order to authorize a meeting of its creditors on December 20, at which time the creditors will be asked to vote on the plan.

If the plan is approved by creditors, Fraser Papers intends to appear before the Ontario Court on December 22 and the US Court on December 23 to seek the necessary court approvals to implement the plan.

December 06, 2010

Wood Cellulose Breakthrough

The July 30, 2009, issue of your Madison’s Lumber Reporter featured the exciting research now in progress by FPInnovations and Professor Mark MacLachlan of the UBC Wood Science department of Chemistry on nanocrystalline cellulose (NCC) at the University of British Columbia in Vancouver.

NCC is a renewable, recyclable and abundant nanomaterial made from the cellulose fibres produced in the wood pulp manufacturing process. Potential applications include optically-reflective films, high-durability varnishes, and innovative bioplastics of interest to a variety of sectors and markets such as the aerospace, automotive, chemical, textile and forestry industries. Businesses pursuing “green” technology are keenly following the development of these bi-products of the forest industry.

Nanocrystalline Cellulose

A doctoral candidate in chemistry, Kevin Shopsowitz, at the University of BC recently stumbled upon a discovery that lead to the creation of glass films that have applications for energy conservation in building design, optical filters, sensors, or for molecule separation in the pharmaceutical industry. The original purpose of the research was to use NCC to create stable materials that could provide a better method of storing hydrogen for the automotive industry.

PhD student Kevin Shopsowitz spilled some of the nanocrystalline in cellulose solution onto a bench top in the lab. When the solution dried, the residue was a “beautiful” iridescent film. A new idea struck.

Mark MacLachlan, associate professor in the chemistry department at UBC, Shopsowitz, post-doctoral fellow Hao Qi, and Wadood Hamad of FPInnovations then mixed the NCC from the wood pulp with a silica, or glass, precursor and then burned away the cellulose. The resulting glass films are composed of pores, or holes, arranged in a helical structure that resembles a spiral staircase. Each hole is less than 1/10,000th of the diameter of a human hair.

The pores in the helix give the films a wide range of applications. When certain liquids are added to the film, the liquid gets trapped in the pores and changes the optical properties of the films which can reflect specific wavelengths of light, such as ultra violet, visible or infrared.

Other researchers have done similar investigations, but until the collaborative work research between FPInnovations at UBC, none had figured out how to use NCC for such an application and what precise range of acidity (pH) the cellulose solution needed to retain NCC’s original chirality — its molecular alignment — and cast it onto the silica it was mixed with.

“By functionalizing the pores to make them more selective to particular chemicals, we may be able to develop new sensors that are very sensitive for detecting substances in the environment,” said Shopsowitz in a UBC press release.

To reduce the energy needed to cool buildings, windows could be treated with the transparent films that reflect infrared light – the light that heats up a building. Right now, metal particles are often used to do this but they tint the windows brown. The colour on the films won’t fade out over time.

“If you have a blue film or a red film it will remain that colour forever because there is nothing chemical on it that can get bleached,” Mark MacLachlan said to the Vancouver Sun. “It’s just pure glass. It’s the nanostructure of the glass that gives the colour.”

“NCC is synthesized from, derived from wood pulp. As a nanomaterial, it is very high tech, actually it is similar to carbon nanotubes on several levels, however it is obtained from completely renewable materials,” explained Wadood Hamad to Madison’s in a phone interview. “And it is practically as safe as table salt.”

“What is fundamentally new about this process we have created is that the NCC acts as a template; it is used as a cast, which engages silica in fine parameters, in the right combination, so the final composition is able — so to speak — to absorb the specific pattern of the template. The silica produced at the end contains no NCC, all the NCC was burnt out and the remaining mesoporous inorganic solid (the silica) is a cast of a chiral nematic liquid crystal formed from NCC ,” detailed Hamad.

The NCC templates could conceivably be recycled, said Hamad in answer to Madison’s question.

“While the quantities of wood pulp needed for this process may be low compared to an average pulp mill output, the value is extremely high,” said Hamad. “These very high end, high value applications are significant. All together they could create fairly high demand for NCC production from wood pulp.”

“For these different kinds of high end uses, the returns on NCC will be much greater than the traditional marketplace for wood pulp.”

Hamad likened NCC to microcrystalline cellulose, which is used in pharmaceuticals.

“Every single pill on the planet has to be made with microcrystalline cellulose, or some cellulose compound, because it has good drug release and delivery aspects. This latest application of NCC to produce mesoporous silica films with tunable chirality is, at the moment, a lab discovery. But, it could quite realistically be scaled up,” concluded Hamad. “This is very novel. It is up to the boards of companies to decide which innovations to go after.”

US Construction Employment

Construction employment exceeded September levels in 29 states, dropped in 20 plus DC, and remained the same in Rhode Island, the US Bureau of Labor Statistics (BLS) reported on Tuesday. National construction employment rose 5,000 in October after sinking 8,000 in September. Similarly, most states with gains in October had lost construction jobs the month before, indicating that the industry is no longer in free fall but remains in flux.

Compared with October 2009, construction employment rose in 11 states plus DC—the largest number of 12-month gains in two years—and fell in 39 states.

“The value of new construction starts edged up 2 per cent in October” but was down 3 per cent year-to-date from January-October 2009 levels, McGraw-Hill Construction reported on Friday, based on data it collected.

In a third sign of gradual improving conditions in construction, BLS reported on Tuesday that mass layoff events (involving 50 or more workers from a single employer) in construction fell 15 per cent from October 2009 to October 2010 and involved 12 per cent fewer workers.

Vietnam Forest Products’ Imports

Import values of farm, forestry and seafood products increased relatively in the first 11 months of this year, according to Vietnam’s Ministry of Agriculture and Rural Development.
Agricultural imports turnover in November earned US$11.58 billion, an increase of nearly 37 per cent compared to last year’s period.

Vietnam Forestry Imports

Vietnam’s mports for November cost an estimated US$7.7 billion, a rise of 5.5 per cent over October, creating a trade deficit for the month of US$1.25 billion, and US$10.7 billion for the first 11 months of the year.

Total import revenue for the January-November period is estimated to reach US$75 billion, a year-on-year rise of 19.8 per cent.

US Home Sales

US October new home sales fell by 8.1 per cent to an annualized rate of just 283,000, according to US Census Bureau data released Wednesday. This follows news Tuesday that existing home sales also dropped, by 2.2 per cent.
September new home sales were upwardly revised to 308,000. New home ales were off 28.5 per cent in year over year comparisons. Median home prices were off 13.9 per cent, to US$194,900, against September’s US$226,300 – bringing prices back to October 2003 levels.

Unsold home inventories fell slightly to 202,000 units. The months’ supply of unsold homes rose to 8.6 months, from 7.9 months in September.

Housing Starts, US

US new home sales rebounded slightly in September after hitting an all-time low in August. But in October, they dropped back down to their July level. Sales appear to be stabilizing at an annualized rate below 300,000.
The drop in existing home sales was likely caused in large part by the foreclosure and mortgage documentation mess. With new home sales, that argument isn’t as strong. While potential buyers in general might be wary about banks practices and procedures surrounding mortgages, with existing home sales foreclosed property sales are relevant.

Many economists believe it could take three years for the industry to get back to a healthy annual rate of sales of around 600,000 homes.

Some analysts downplayed the drop in sales, saying that when the market is this low it is vulnerable to high volatility.

“Sales are bumping along the bottom, showing no real inclination to start recovering or, thankfully, to fall any further,” said Ian Shepherdson, chief US economist at High Frequency Economics, to Associated Press.

Buyers are worried that home prices could fall further. Some can’t sell their current home to upgrade to a larger home, either because they have lost equity or they can’t find prospective buyers who can qualify for loans under tighter bank lending standards. The market is declining even with mortgage rates near their lowest levels in decades.

Distressed sales, including foreclosures, have been about one-third of the market, while first-time buyers have been as much as 50 per cent. Both are high by historic levels.

If the supply of previously foreclosed homes continues to dry up, housing prices might stabilize or even rise. That would provide long-sought relief for sellers, but could keep many potential buyers out of the market and put sales in a permanent slump.

EACOM Secures $50 Million

Montreal’s EACOM Timber Corporation reported Thursday that it entered into a three-year, $50 million revolving credit facility agreement with GE Capital in Canada. The facility will be used to fund working capital and general corporate purposes.

Under the terms of the facility, amounts drawn and to be repaid are determined by a borrowing base calculation that fluctuates. That portion of the $50 million commitment that is not drawn will be subject to a stand by fee and upon closing, EACOM was required to pay a closing fee. The facility is secured by a first priority, perfected security interest on all existing and future assets of EACOM.

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